Vacancy continues to fall in the 131-million-square-foot Fort Worth warehouse/ distribution market, and rents are rising moderately but steadily. The second quarter of 2012 saw 294,000 square feet of positive net absorption, bringing the half-year total to 745,000 square feet. Although a 20,000-square-foot building for the Red Ball Oxygen Company completed construction in May, the vacancy rate fell 20 basis points to 13.1%. That is down 130 basis points from a year earlier. The average asking rent rose 0.5% to $3.76 psf with the average effective rent up 0.9% to $3.32 psf, bringing the year-over-year gains to 1.1% and 1.8%, respectively.
The vacancy rate fell 10 basis points and rents rose 0.3% by both measures in July, and Reis predict the rate will reach 12.9% by year-end 2012 as rents post gains of around 3.0% for the year. Similar gains are expected for the years from 2013 to 2016. Although development is forecast to pick up, demand is expected to pick up more, rising from about 1.3 million square feet in 2012 to more than 2 million in 2014. The vacancy rate is forecast to drift down toward 12.0%.
The 10.6-million-square-foot Fort Worth Flex/R&D market is improving rapidly. The vacancy rate fell 80 basis points in the second quarter to the relatively low rate of 9.8%, and slipped another 40 in July. The second quarter rent gains were 0.3% asking and 0.5% effective, to $6.68 psf and $5.76 psf, with a 0.2% gain for the effective average in July. Vacancy is forecast to change relatively little through 2016, as rents rise 2.9% asking and 3.3% effective in 2012 and somewhat less in subsequent years. Unlike for warehouse/distribution, Flex/R&D new supply and net absorption totals are forecast to be very modest.
Cushman & Wakefield reports an overall vacancy rate of 9.4% and a weighted average net rental rate of $3.31 psf for warehouse/distribution and $7.77 psf for office/service for 100.8 million square feet on the Fort Worth side of the Metroplex. The Dallas side has 413.6 million square feet per Cushman & Wakefield.